Photo: JOHN DAVENPORT/jdavenport@express-news.net, SAN ANTONIO EXPRESS-NEWS

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Oil is unloaded from tanker trucks where it will be refined at the Valero Three Rivers refinery in Three Rivers, Texas. Much of the oil that is being extracted from the Eagle Ford shale formation is being refined at Three Rivers.

Oil is unloaded from tanker trucks where it will be refined at the Valero Three Rivers refinery in Three Rivers, Texas. Much of the oil that is being extracted from the Eagle Ford shale formation is being

Photo: JOHN DAVENPORT/jdavenport@express-news.net, SAN ANTONIO EXPRESS-NEWS

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The Badger Mining Company in George West, Texas just south of the Valero Three Rivers refinery provides much of the sand used in the hydralic fracturing process that is used to extract oil from the Eagle Ford shale formation.

The Badger Mining Company in George West, Texas just south of the Valero Three Rivers refinery provides much of the sand used in the hydralic fracturing process that is used to extract oil from the Eagle Ford

Photo: JOHN DAVENPORT/jdavenport@express-news.net, SAN ANTONIO EXPRESS-NEWS

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The Valero Three Rivers Refinery in Three Rivers, Texas between San Antonio and Corpus Christi refines a lot of oil from the Eagle Ford shale formation where the process of hydraulic fracturing is taking place.

The Valero Three Rivers Refinery in Three Rivers, Texas between San Antonio and Corpus Christi refines a lot of oil from the Eagle Ford shale formation where the process of hydraulic fracturing is taking place.

Photo: JOHN DAVENPORT/jdavenport@express-news.net

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A tanker truck (background) unloads oil into storage tanks that will be refined at the Valero Three Rivers Refinery in Three Rivers, Texas. In the foreground is a custody transfer station that helps move the oil from the storage tanks (behind truck) over to the refinery.

A tanker truck (background) unloads oil into storage tanks that will be refined at the Valero Three Rivers Refinery in Three Rivers, Texas. In the foreground is a custody transfer station that helps move the

Photo: JOHN DAVENPORT/jdavenport@express-news.net, SAN ANTONIO EXPRESS-NEWS

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These pipes are located at a transfer station on the west side of the Frio River near Three Rivers, Texas. Oil extracted from the Eagle Ford shale formation is unloaded from tanker trucks and then tranferred from this location where it moves through a pipeline underneath the Frio river to the Valero Three Rivers Refinery where it is then refined. Towers at the Valero Three Rivers Refinery can be seen in the background.

These pipes are located at a transfer station on the west side of the Frio River near Three Rivers, Texas. Oil extracted from the Eagle Ford shale formation is unloaded from tanker trucks and then tranferred

NuStar Energy LP and Valero Energy Corp. have agreed that NuStar will add to its pipeline system to enable Valero to transport more crude oil from the rapidly developing Eagle Ford shale to three of its South Texas refineries.

The changes will help Valero transport more crude to its plants in Three Rivers and Corpus Christi, where it has two refineries.

The deal between the two San Antonio-based companies “is part of a larger project to optimize our pipelines in South Texas,” NuStar spokeswoman Mary Rose Brown said, as part of improvements expected to cost $135 million to $150 million.

NuStar said it will reverse an 8-inch pipeline that now transports refined products, such as gasoline, from Corpus Christi to Three Rivers, and make it a crude-oil pipeline.

The pipeline is expected to be converted by the end of this month.

Also, NuStar said it will modify existing sections of its pipelines in South Texas and build new lines to transport crude.

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NuStar will build 55 miles of new 12-inch pipeline that will connect to existing pipelines to move crude oil from Corpus Christi to Valero's Three Rivers plant. That system is to be completed by the second quarter of next year.

“These projects are an important part of our ongoing strategy to increase our customers' ability to move crude in South Texas,” NuStar CEO Curt Anastasio said.

“With the growing production from the Eagle Ford region, NuStar is in the unique position to provide Valero and our other customers with quick transportation solutions given the fact that we have hundreds of miles of existing pipeline running from that region into Corpus Christi, where it can be refined or transported to other locations.”

Anastasio recently told shareholders that more crude shipped through its new pipelines and more storage at its terminals is expected to boost earnings for the company starting in the second quarter of 2012.

Valero spokesman Bill Day said NuStar's additions “will help ease the logistics of getting lower-cost Eagle Ford oil to where it's needed” at Valero's refineries. Eagle Ford crude is less expensive for Valero to buy than imported oil.

Other projects as part of the improvement plan include NuStar's deal with TexStar Midstream Services LP to transport crude from the Eagle Ford shale and a partnership with Oklahoma-based Velocity Midstream Partners LLC to develop a 70-mile pipeline to transport more than 100,000 barrels a day of Eagle Ford crude that will connect with a storage facility NuStar is building at Three Rivers, about 75 miles south of San Antonio.